BlackRock Starts ETF in Brazil to Track U.S. Benchmark S&P 500

(Bloomberg) -- BlackRock Inc. said it will list an exchange-traded fund on the Brazilian stock exchange to track the U.S. benchmark Standard & Poor’s 500 Index.

The ETF will be the first listed in Brazil linked to the performance of stocks trading outside the country, BlackRock spokeswoman Melissa Garville said in an e-mailed statement. The ETF, to be called the iShares S&P 500 FIC FI Investimento no Exterior, will start trading April 29, according to a separate statement from the exchange operator, BM&FBovespa SA.

“It’s another investment alternative,” Andre Demarco, products and services officer at BM&FBovespa, said in a phone interview from Sao Paulo. “Local hedge funds and pension funds showed the demand for it.”

The exchange operator is in talks with Itau Unibanco Holding SA to start another ETF linked to the S&P 500 in the next two months, he said. Itau’s press office didn’t immediately return an e-mail sent after office hours requesting comment.

The BlackRock-managed fund will be available to investors with over 1 million reais ($450,000) in assets, according to the exchange operator’s statement. The Itau-managed ETF is pending regulatory approval, Demarco said.

ETFs are bundles of securities that trade like stocks on an exchange and usually track an equity, bond, commodity or currency index. They hold about $2.33 trillion globally, data compiled by Bloomberg show.

Ibovespa Trails

BlackRock’s iShares unit is the largest provider of ETFs worldwide, with about $930 billion in assets, including exchange-traded notes, according to data compiled by Bloomberg. The firm also leads the market for ETFs listed in Brazil, with eight funds managing $667 million.

Brazil’s benchmark Ibovespa fell 27 percent in dollar terms in 2013, its third year of losses. The gauge is down 14% in the past 12 months, trailing the 20% advance of the S&P 500.